Part 2 - Sectional Titles

Question 1

How can Exclusive use areas be created:

Chapter 1 - 9

Answer 1

1) By the developer. The Developer may subsequent to the opening of the scheme, but prior to the establishment of the body corporate, create exclusive use areas.
2) By the Body Corporate on a unanimous resolution
3) By the developer or Body Corporate in terms of the rules.

Question 2

True of false – you can bond an exclusive use area crated in terms of rules

chapter 1 - 9

Answer 2

False. Only exclusive use areas created by the developer prior to the establishment of the Body Corporate and by the Body Corporate through unanimous resolution can have a bond registered over the.

Question 3

How does the developer hold an exclusive use area and how does he transfer this.

Chapter 1 - 9

Answer 3

He hold the property by certificate of registered title and is transferred by way of notarial deed of cession.

Question 4

What is the definition of building as per the sectional title act

Chapter 1 - 10

Answer 4

1) A structure of a permanent nature
2) Erected or to be erected; and
3) Which is shown on a sectional plan as part of a scheme

Question 5

With reference to the definitions in the sectional title Act. What is a:
1) A section
2) A Unit
3) An exclusive use area
4) A participation quota

chapter 1- 18

Answer 5

1) A section means a section shown on a sectional plan and may consist of non-adjacent parts of the building
2) A unit is a section together with its undivided share in the common property.
3) An exclusive use area means a part of the common property for the exclusive use by the owner of a section
4) A participation quota is the percentage determined according to the follow:
a. In the case of a residential scheme only, the floor area to the nearest meter of a section, divided by the total floor area of all sections
b. In the case of a scheme other than a residential scheme, as determined by the developer.

Question 6

In terms of the sectional title act, described the following:

1) Special resolution

2) Unanimous resolution

chapter 1 - 18

Answer 6

A Special resolution is passed by 75% of the members present at a members meeting. Notice must be given 30 days and the notice must provide for the details in respect of what the special resolution is in respect of.
A unanimous resolution is taken by all members, in favour of the resolution at a meeting wherein at least 80% of all members are present. Notice must be given 30 days before the meeting and the notice must provide for the details in respect of what the special resolution is in respect of.

Question 7

In terms of the sectional title act, there are three ways of creating an exclusive use area. Discuss briefly?

chapter 1 - 18

Answer 7

1) It can be created by the developer. This takes place before the BC is established but after the sectional scheme has been opened. This can be registered into an owner’s name.

2) The Body Corporate can create an exclusive use area by means of unanimous resolution. This can be registered into an owner’s name.

3) In addition to the above, an exclusive use area can be created in terms of the rules. That being said, such an exclusive use area cannot be registered into an owner’s name.

Question 8

Described briefly what rights lessees of flats used for residential purposes have when the building is converted to a sectional title scheme.

chapter 1 - 18

Answer 8

Section 10 protects lessees in an unsectionalized building. In terms of this section, the developer must offer the unit to sell to the lessee and give notice of such an offer to the lessee, which notice must give the lessee at least 90 days.
If the lessee refuses the offer or it expires, the developer may not within 180 days from either the time that the offer was refused or expired offer the unit to a third party for less than the amount in the original offer unless the developer has again made an offer to the lessee.
The lessor cannot require the lessee to vacate the property unless they are in breach of their lease agreement. The lessor can also not require the lessee to tender a higher rental.

Question 9

A section title scheme consists of six unit. The participation quota of five of the units is 150 000 each and that the sixth is 250 000. A unanimous resolution is required to affect luxurious improvements. Proper notice has been given and a meeting is held. The owners of the five smaller units attend the meeting and vote in favour of the resolution. The owner of the sixth unit did not attend the meeting.

May the trustees now proceed with the luxurious improvements. Motivate your answer.

Chapter 1 - 18

Answer 9

A unanimous resolution requires 80% of all the members of the body corporate, in number and value to be present. In this case more than 80% of the members in number were present, but only 75% of the members in value were present and therefore no unanimous resolution was taken.

Question 10

A sectional title scheme consists of four units each of which has a participation quota of 12.5 and a fifth unit of which quota is 50.5. Proper notice of special resolution has been given. At the meeting, the owners of the four smaller units vote in favour of the resolution and the owner of the large unit votes against the resolution.
Discuss briefly whether the resolutions has been passed

Chapter 1 - 18

Answer 10

The resolution has not been passed. The requirement is that 75% of the votes present, calculated in number and value, must vote in favour of the resolution. In this case 80% of the votes in number voted in favour of the resolution but only 50% of the votes in value noted in favour thereof.

Question 10

A sectional title scheme consists of four units each of which has a participation quota of 12.5 and a fifth unit of which quota is 50.5. Proper notice of special resolution has been given. At the meeting, the owners of the four smaller units vote in favour of the resolution and the owner of the large unit votes against the resolution.
Discuss briefly whether the resolutions has been passed

Chapter 1 - 18

Answer 10

The resolution has not been passed. The requirement is that 75% of the votes present, calculated in number and value, must vote in favour of the resolution. In this case 80% of the votes in number voted in favour of the resolution but only 50% of the votes in value noted in favour thereof.

Question 10

A sectional title scheme consists of four units each of which has a participation quota of 12.5 and a fifth unit of which quota is 50.5. Proper notice of special resolution has been given. At the meeting, the owners of the four smaller units vote in favour of the resolution and the owner of the large unit votes against the resolution.
Discuss briefly whether the resolutions has been passed

Chapter 1 - 18

Answer 10

The resolution has not been passed. The requirement is that 75% of the votes present, calculated in number and value, must vote in favour of the resolution. In this case 80% of the votes in number voted in favour of the resolution but only 50% of the votes in value noted in favour thereof.

Question 11

What does a block plan show in a sectional title scheme

Chapter 1 - 19

Answer 11

The details of the land and buildings at ground level.

Question 12

In what circumstances is a tenants meeting not necessary when a developer intends applying for the opening of a sectional title register in respect of a block of flats? Discuss briefly.

Chapter 1 - 19

Answer 12

1) When all tenants have agreed that they do not wish to purchase the unit they are occupied.

2) The scheme constitutes a new building about to be constructed

3) Where there are no tenants I.e, the building is vacant.

Question 13

What are the 3 steps in presenting a sectional title scheme

Chapter 1 - 21

Answer 13

1) The Developer must instruct a surveyor or architect to prepare a draft sectional plan. This plan must then be submitted to the surveyor-General for approval
2) When the surveyor-General grants his approval the draft sectional plan becomes the official sectional plan
3) The developer then makes application to the deeds office for the opening of a sectional title register. This is done by lodging the approved sectional plan with an application in terms of Form B.

Question 14

Wherein an encroachment is indicated on a sectional plan, what must be done.

Chapter 1 - 22

Answer 14

A bilateral notarial deed of encroachment must be registered either before of simultaneously with the application for opening the sectional title register.

Question 15

Your client has two pieces of land that he wants to build a sectional scheme. What are your options:

chapter 1 - 23

Answer 15

1) Consolidate the pieces of land in terms of section 40, or
2) Tie the pieces of land to each other by way of notarial tie agreement.

Question 16

Your client wishes to build a sectional scheme with an option to extend. The extension will take place on an adjacent piece of land. Must anything be done at the start of the matter?

Chapter 1 - 23

Answer 16

Yes, the developer must either consolidate or notarial tie the properties either prior or at the same time as opening the sectional scheme.

Question 17

Exam Question : Your client owns two erven which are not contiguous. He intends applying for the opening of a sectional title register. What is the first and most important procedure to be adopted in respect of the land.

Chapter 1 - 24

Answer 17

Nothing has to be done. The erven do not have to be notarially tied. A sectional title scheme can be erected on tow or more non-contiguous pieces of land, provided that the buildings to be divided into sections are erected on only one of the pieces of land. Buildings comprising common property may be erected on the other piece of land.

Question 18

Exam Question : You are approached by Johan Steyn, the owner of 20 flats which were erected and completed in 1979, and situated on two contiguous erven, He instructs you to open a sectional title register in respect of the aforementioned properties.

Must the properties necessarily be consolidated? Discuss briefly

Chapter 1 - 24

Answer 18

Yes, they must be either be consolidated or notarially tied to one another because the buildings comprising 20 flats were erected on both pieces of land.

Question 19

Exam Question : May a sectional title scheme relate to more than one building situated, to be erected or being in the process of erection on the same piece of land or on more than one piece of land, whether contiguous or non contiguous?

Chapter 1 - 24

Answer 19

Yes, it may, provided that the building or buildings to be divided into sections are situated on only one such piece of land, or on two or more such contiguous pieces of land which are notarially tied and registered into the name of the same person.

Question 20

Exam Question : Can a sectional title register be opened and a right of extension be reserved over more than one piece of land that has not be consolidated?

chapter 1 - 24

Answer 20

Yes, as long as the notarial tie agreement is registered simultaneously with the opening of the sectional title register

Question 21

Exam Question : in terms of the Sectional Titles Act, how are the boundaries of a section defined?

Chapter 1 - 25

Answer 21

Section 5(4) of the sectional title management schemes act indicates that a section shall be the floor, walls and ceiling. And shall include all windows and doors. And shall include parts that cannot be defined in the boundaries such as a balcony, stoep or atrium but which are appurtenant to a part of the section.

Question 22

Exam Question: What documents must be lodged at the deeds office for the opening of a sectional title register and registration of a sectional plan?

Chapter 1 - 28 to 31

Answer 22

1) Sectional plan in duplicate and approved by Surveyor-General.
2) Application for the opening of a sectional title – Form B – signed by the developer.
3) A schedule of conditions: prepared and certified by a conveyancer containing the following
a. The existing conditions of the title burdening or benefiting the land
b. The servitudes of the title deed
c. Other registrable conditions imposed by the developer
d. The name of scheme
e. The full name and address of the developer
f. The number of the title deed and land concerned
4) Title deed of the land in question
5) SPLUMA certificate by the municipality
6) Mortgage bond
7) Consent of the mortgagee to:
a. Open the sectional title register
b. The registration of the sectional plan.
c. The endorsement of such bond to the effect that it attaches:
i. The sectional and common property
8) A certificate by a conveyancer confirming that the statutory rules are applicable.
9) A certificate by the Chief Ombud approving the unique rules for the scheme
10) A certificate of real right of extension of the scheme
11) A certificate of real right of exclusive use area.
12) Certificate of registered sectional title.
If opened on farm land
13) A letter from the minster of agriculture confirming that the land is not agricultural land or , if the land is agricultural land, consent from the minister of Agriculture.

Question 23

Exam Question : When applying for the opening of a section title register and a right of extension is reserved, certain documents must be lodged. List four of the documents that must be lodged relating to the right of extension.

Chapter 1 - 32

Answer 23

1) A certificate of real right of extension of scheme
2) Plans referred to in section 25(2)(a) and (b), namely a plan to scale of the buildings
3) A schedule indicating the estimated participation quotas of all the sections in the scheme after such section or section have been added to the scheme
4) Particulars of any substantial difference between the materials to be used in the contraction of the new buildings and those used in the existing building.
5) Such other documents and particulars as may be prescribed

Question 24

Exam Question : Your client and developer, with your assistance as conveyancer, opened a sectional title register. The original section 11(3)(b) schedule of conditions, as is practice, is not delivered back to your as the conveyancer and you are advised by the deeds office that the section 11(3)(b) schedule of conditions has been lost or destroyed and is not available in its records. Describe fully the procedure to remedy the situation.

Chapter 1 - 33

Answer 24

1) Application must be made for the replacement of the schedule.
2) Before filing the replacement schedule, notice of intention to file the replacement schedule must be published in the gazette and news paper within the jurisdiction of the deeds office for 2 consecutive issues (both gazette and news paper)
3) After notice has been published, the schedule of conditions must be open for inspection at the deeds office for 6 weeks.
4) If an objection is lodged, that person must within one month make application to court to prohibiting the registrar from filing the replacement schedule.
5) If no objection is received , the replacement schedule must be endorsed with the registrar’s endorsement and filed in the sectional title file.
6) If the original is subsequently found, it will be void.

Question 25

What is the prescribed form for a deed of transfer of a sectional title unit?

Chapter 1- 35 - Example 1F

Answer 25

Form H (prescribed by the regulatins to the sectional titles Act.

Question 26

Provide 5 differences between a full title deed of transfer and sectional title

Chapter 1 - 35 to 36

Answer 26

1) reference must be made to the exclusive use area in the causa clause, and
2) The second difference is that no refernec is made to “his/her/theri heirs, exucetors, administrators or assigns”. This applies to all kinds of transferees such as companies and trusts.
3) The description of the property : Section no. 25 as shown and more fully descrvied on sectional plan No SS 46/2009 in the scheme known as Blue Diamond in respect of the land and buildings sitiated at the The Farm Diamond 123 , Registration Division J.R, province of Gauteng, of which section the floor area accorrding to the said sectional plan is 175 (One seven five) square metres in extent.
4) The extending clause is very simple. It only makes reference to the current deed : Held by Deed of Transfer ST3377/2013
5) General conditions are not included in the deed and reference must be made to the schedule of conditions.

Question 27

Exam Question : Section 25 in the sectional title scheme Blue Diamind SS46/2009 measuring 100 square metres, isistuated on the farm Diamond 123. Invent your own further particulars and draw the property description as it will apear in a mortgage bond to be regsitered.

chapter 1 - 37

Answer 27

a)Section no. 25 as shown and more fully descrvied on sectional plan No SS 46/2009 in the scheme known as Blue Diamond in respect of the land and buildings sitiated at the The Farm Diamond 123 , Registration Division J.R, province of Gauteng, of which section the floor area accorrding to the said sectional plan is 100 (One hundred) square metres in extent.

b) an undivided share in the common property in the scheme apportioned to the said section in accordance with the participation quota as endorsed on the said sectional plan

Held by deed of transfer ST123/2012 and subject to such conditions as set out in the aforesaid deed.

Question 28

Wherein a certificate of registered sectional title is issued for the developer, what form must be used?

Chapter 1 - 38

Answer 28

Form C

Question 29

A condition clause for sectional titles is different to that of a deed of transfer and is standard. There are only 2 reasons why it will change. What are these to reasons:

Chapter 1 - 39

Answer 29

Where the owner is the developer or an owner.

Question 30

Wherein special conditions are to be inserted, where are same inserted.

chapter 1 - 39

Answer 30

Paragraph iii, under the standard terms for the developer and owner.

Question 31

What document must the conveyancer lodge with every transfer of a sectional title unit and what two aspects must be certified?

chapter 1 - 42

Answer 31

A section 15B(3)(a) conveyancer’s certificate.
1) That all monies have been paid to the Body Corporate
2) Where there is a real right of extension and whether same was provided for in the agreement, if not, that the purchaser has waived the right to have the agreement regarded as void.

Note: Wherein the unit being transferred is the first unit in the corporate body, levies is not payable and the wording must read as follows:

“The body corporate has not yet been established and therefore no moneys are payable to such body corporate.”

Question 32

Wherein a body corporate is estblished, what certificate is issued.

Chapter 1 - 43

Answer 32

A certificate of Establisment of a Body Corporate - Form W - lodged in triplicate.

Question 33

Explain the application of section 15B(3)(c) wherein the transfer is the developer.

Chapter 1 - 47

Answer 33

Wherein the trasnferor, an affidavit by the developer must lodged as to whether section 10 applies or not. If so, the particular transfer is effected in terms of a contract which is not contrary to any provisions of the said section 10.

A sheriff in the exuection of an order does not need to supply such an affidavit, but an executor, liquidator or trsutee must adhere to section 15B(3)(c)

Question 34

Exam Question : Co-developers entered into a partition agreement. Will section 10 of Act 95 of 1986 find application?

chapter 1 - 48

Answer 34

No, section 10 does not find applicaition

(there are no new owners being introduced.)

Question 35

What documents are lodged wherein a sectional title unit is transfered before and after the establisment of the body corporate.

chapter 1 - 49

Answer 35

All transactions:
1)Deed of transfer
2)Power of attorney
3)Title deed
4)Trasnfer duty receipt
5)Conveyancer certfiicate 15B(3)(a)
6)Clearance certificate

_Additional before the establisment of the BC _
7) Clearance certificate by Local authoirty in respect of all land and buidlings comprising the scheme
8) Certificate of Establishment of Body Corporate.

Question 35

What documents are lodged wherein a sectional title unit is transfered before and after the establisment of the body corporate.

chapter 1 - 49

Answer 35

All transactions:
1)Deed of transfer
2)Power of attorney
3)Title deed
4)Trasnfer duty receipt
5)Conveyancer certfiicate 15B(3)(a)
6)Clearance certificate
7)Wherein the property is subject to a special condition, I.e, that the property is subject to the consent of the HOA.

Additional before the establisment of the BC
7) Clearance certificate by Local authoirty in respect of all land and buidlings comprising the scheme
8) Certificate of Establishment of Body Corporate.

Question 36

In respect of the first transfer and subsequent transfer of exclusive use property, what documents are lodged?

Chapter 1 - 50

Answer 36

Developer
1) Certificate of real right of exclusive use area
2) Notarial deed of cession of exclusive use area
3) Clearance certificate by the municipality for the exclusive use area
4) Transfer duty receipt or exemption.

subsequent transfer
1) Notarialy title deed of cession exclusive use area
2) Notarial deed of cession of exclusive use area
3) Clearance certificate by the municipality for the exclusive use area
4) Transfer duty receipt or exemption.

Question 37

Exam Question : You have, on behalf of your client opened a sectional title register. No transfers of units in the scheme have as yet been registered. You now have instructions to register the first transfer of a unit, being Unit No 1. Unit 1 has the exclusive use of a garden area, described as G1.
List the documents which you must lodge in the Deeds Office in order to achieve registration of the transfer of the unit and exclusive use area.

chapter 1 - 51

Answer 37

List of documents
1. Deed of transfer
2. Power of attorney
3. Title deed
4. Section 15B(3)(a) Conveyancer’s certificate
5. Transfer duty receipt
6. Clearance certificate – the unit
7. Clearance certificate - for the land and buildings comprising the scheme
8. Certificate of establishment of a Body Corporate.
9. Affidavit by the developer – where section 10 applies.
10. Mortgage bond
11. Mortgagee’s consent
12. Mortgage bond – if there is a new mortgage bond being registered.
13. Certificate of real right of exclusive use area
14. Clearance certificate – for exclusive use area

Question 38

Exam Question : When will a rates clearance certificate be lodged when dealing with a sectional title scheme?

Chapter 1 - 51

Answer 38

a) At the time of the first transfer of a unit in the scheme; and
b) Where provision is made for the separate rating of units in a scheme.

Comment - Since 1 July 2009, in terms of the local goverment: Municipal Property Rates Act 6 of 2004, a clearance certificate must also be ldoged upon the cession of exclusive use areas and real rights of extension.

Question 39

Exam Question : List any 5 documents that must be kept on the conveyancers file for a period of at least 6 years in respect of registration sectional title transfers and mortgage bonds. You may not guess and will be penalised should you list unnecessary documents.

Chapter 1 - 52

Answer 39

In respect of transfer
2) 1) The original or duplicate-original of the conveyancer’s certificate under section 15(3)(a)
2) The power of attorney to pass transfer;
3) The clearance certificate or other certificate issued by the body corporate;

Besides the above mentioned documents the conveyancer may keep any other documents relating to the status, authoirty or capacity deemed necessary.

Sectional mortgage bonds
1) the power of attorney to register the mortgage bond, unless such authoirty is contained in the morgage bond.
2) Any other documents, including powers of attorneys, deemed necessary by the conveyancer and relating to status, authoirty or capacity of the mortgagor; and
3) Any consent grnated in terms of section 15(2) of the Matriminal Property Act No 88 of 1984.

Question 40

Wherein a person is a joint owner in undivided share in a sectional title unit, what can be issued in respect of their ownership and what forms must be used? What documents must be lodged?

chapter 1 - 55

Answer 40

a certficate of registered sectional title.
Application can be made with Form I and the cerificate is issued on Form J

Documents that must be lodged
1) Application in terms of Section 15B(5) or 15B(5A)
2) A draft certificate of registered section title - form J
3) sectional title deed of unit
4) title deed of real rights
5) Sectional bond
6) sectional bond registered over a real right(s)

Question 41

What documents are to be lodged for cancellation of real right of extension?

chapter 1 - 58

Answer 41

1) Applicant in terms of section 15B(1)(e) of the sectional Titles Act
2) Written consent of the holder of the section 25-right to cancellation
3) Sectional title deed
4) mortgage bonds
5) consent of the bondholders
6) transfer duty receipt - for the acquisition of the common property.

Question 42

What documents must be lodged at the deeds registry for the transfer of a portion of the common property

chapter 1 - 59

Answer 42

1) Deed of transfer - Form H
2) Power of attorney
3) Unanimous resolution - certified by two trustees
4) Subdivisional diagram
5) Consent to subdivision from the municipality
6) transfer duty receipt
7) rates clearnce certificate
8) all the mortgage bonds
9) written consent by the mortgagees.

Question 43

Does the Act permit a body corporate to apply for a certificate of a reigistered title for a defined portion of the common property.

chapter 1 - 62

Answer 43

No - Registrar’s conference Resolution 71/2009

Question 44

A developer is the soleowner of the sectional title scheme and no body corporate exists. The develoepr wants to subduvude the common property and register a certificate of registered title for that portion of the common property. How can the developer obtain a title for the portion of the common property where he/she wants to retain the subdivided portion.

Chapter 1 - 62

Answer 44

Section 3(1) of the Sectional Titles Act can be invoked to allow for the issuing of certificate of registered title in terms of section 43 of the Deeds Registries Act, provided a certificate by a conveyancer as provided for in regulation 29 of the Sectional Titles Act is submitted. The provisions of section 17 and 18 of the Sectional Titles Act apply mutatus mutandis.

Question 45

Exam Question : What must be lodged where a part of the common property of a sectional title scheme has been sold and is to be transferred in terms of the deed of sale entered into by the Body Corporate and a developer? Assume also that a whole of a section falls on the part of the common property to be transferred and the section is bonded. There are no exclusive use areas in the scheme.

Chapter 1 - 62

Answer 45

Documents to be lodged:
1)Deed of transfer - Form H
2)Power of attorney
3)copy of unanimous resolution certified by two trustees of the Body Corporate.
4)subdivisional digram
5)consent to subdivide from relevant municipality
6)Transfer duty receipt
7)Rates and clearance certificate
8)All Mortgage bonds
9)Consent by the mortgagees
10)Sectional title deed of the unit
11)written consent of the owner ti the cancellation of the unit
12)All sectional bonds registered over the unit
13)written consent by the mortgagee to cancellation
14)title deeds of real rights
15)written consent by the holder of real rights
16)transfer duty receipt.

Question 45

Exam Question : What must be lodged where a part of the common property of a sectional title scheme has been sold and is to be transferred in terms of the deed of sale entered into by the Body Corporate and a developer? Assume also that a whole of a section falls on the part of the common property to be transferred and the section is bonded. There are no exclusive use areas in the scheme.

Chapter 1 - 62

Answer 45

Documents to be lodged:
1)Deed of transfer - Form H
2)Power of attorney
3)copy of unanimous resolution certified by two trustees of the Body Corporate.
4)subdivisional digram
5)consent to subdivide from relevant municipality
6)Transfer duty receipt
7)Rates and clearance certificate
8)All Mortgage bonds
9)Consent by the mortgagees
10)Sectional title deed of the unit
11)written consent of the owner ti the cancellation of the unit
12)All sectional bonds registered over the unit
13)written consent by the mortgagee to cancellation
14)title deeds of real rights
15)written consent by the holder of real rights

Question 46

Exam Question : A city council wishes to widen a road bordering on a secitonal title complex. This involves trnasferring to the council a strip of common property. Explain the procedure.

Chapter 1 - 62

Answer 46

Dealing with the common property are dealt with in Section 17 of the Sectional titles Act. The following procedure is to be adopted:
1) The owners, upon unanimous resolution and with the written consent of any holder of a right of extension direct the body corporate on their behalf to alienate a portion of the common property.
2) Approval of the subdivision is obtained from the municipality
3) A diagram is prepared in respect of the portion to be alienated.
4) If the whole of a section 25 right of extension is affected by the alienation of the common property, such right must be cancelled with the consent of the holder thereof on submission of the title deed of such right
5) Transfer is effected by the trustees of the body corporate and registration is effected by a deed of transfer with attached diagram in favour of the transferee registered by the registrar of dees. The registrar shall make the appropriate endorsements on his records.
6) The transfer must be accompanied by a copy of the authorisation referred to in (1) above, certified by two trustees of the body corporate and written consent of the holder of the section 25 right.
7) THe consent of all bondholders in respect of the units must be obtained and lodged simultaneously.
8) The Registrar shall notify the surveyor-general of the reversion of the portion of the common property to the land register and the surveyor-general shall make the appropriate endorsement on the original sectional plan and on the deeds registry’s copy.

Question 47

What are the requirements to subdivide or consolidate properties in the a sectional title scheme.

Chapter 1 - 63

Answer 47

1) You require the consent from the Trustees of the Body Corporate
2) A land surveyor is appointed to prepare the draft sectional plan
3) The draft plan is then submitted to the surveyor general for approval.
4) After approval, apply to the registrar of deeds for registration of the sectional plan

Question 48

Exam Question : What documents are lodged in respect of the subdivision of a sectional unit.

Chapter 1 - 64

Answer 48

1) Application for subdivision
2) Consent from the local authority – if required
3) Title deed
4) Certificate of registered sectional title
5) 2 copies of the sectional plan of Subdivision
6) If the unit has a bond – bond and consent
7) Title deeds of such other registered real rights
8) If partitioning - Partition agreement with Transfer Durties (section 15B(3)(b), Transfer Duty and Section 15b(3)(a) certificate (For levies)

Question 49

Exam Question : What documents are lodged in respect of the consolidation of a sectional unit.

chapter 1 - 65

Answer 49

1) Application for consolidation
2) Consent from the local authority – if required
3) Both Title deeds
4) Certificate of registered sectional title
5) 2 copies of sectional plan of consolidation
6) If the unit has a bond – bond and consent
7) Title deeds of such other registered real rights

Question 50

Exam Question : X owns a unit in a sectional title development scheme. The section forming part of the unit is a very large flat on the ground floor of the building. It has adjoining it a large garden area. Which has been ceded to X as an exclusive use area. He proposes to arrange for it to be subdivided into two sections. He proposes to retain one of these and to sell the other to his friend Y. Similarly X no longer requires the large garden area and he proposes to similarly divide that exclusive use area into two portions, of which he will retain one. He proposes to vest the other portion in Y. Explain briefly the steps which would have to be taken to implement this proposal and to ensure that both X and Y will in due course end up as the registered owners of their respective smaller flats and their respective smaller exclusive use areas.

cha[ter 1 - 67

Answer 50

First you would need to get the approval from the body Corporate, this is given by two trustees on the approval of a special resolution taken at a Body Corporate General meeting.
Once consent has been obtained, a surveyor must be appointed to prepare a draft sectional plan. Once the plan is complete, the draft sectional plan is submitted to the registrar of deeds for registration of the sectional plan.
Other supporting documents that must be lodged are the following:
1) Application in terms of section 22 for the subdivision to take place.
2) Existing title deed
3) 2 copies of the Sectional title plan for subdivision
4) Clearance certificate
5) Transfer duty receipt or exemption
6) If there is a bond, a copy of the bond together with the necessary consent
7) If other real rights are registered against the property, such title deeds must also be lodged.
8) Consent from local authority – if required.
9) Certificate of registered sectional title
In respect of the Exclusive use area:
The Sectional titles Act does not provide for the subdivision of exclusive use areas and therefore the garden area cannot be subdivided. The existing exclusive use area will have to be cancelled by means of a bilateral notarial deed between the holder of the exclusive use area and the Body Corporate, in which event such area will revert back to the Body Corporate. Two smaller exclusive use areas (Garden areas) will then have to be re-delineated whereafter it can be ceded by the body corporate to X by means of bilateral notarial deed of cession. This obviously needs to be arranged with the body corporate.

Question 51

Exam question : Do you have to submit consent by the trustees of the body corporate when an owner applies for registration of a consolidation of sections in terms of section 23 of the sectional Titles Act 95 of 1986? Motivate your answer.

chapter 1 - 67

Answer 51

No, section 21 provides the consent of the trustees of the corporate must be obtained before submitting the draft sectional plans to the surveyor-general. A chief Registrar’s Circular therefor provides that it is not necessary to lodge the consent of the trustees of the body corporate on the registration of the sectional plan of the subdivision or consolidation.

Question 52

May Sectionals in a sectional title scheme that are not contiguous be consolidated with each other.

chapter 1 - 67

Answer 52

Yes, sections that are not attached to each other may be consolidated as section 23 of the Sectional Titles Act does not require contiguity of section.

Question 53

Exam Question : Wherein an owner wants to extend their section, what documents must be filed?

chapter 1 - 70

Answer 53

1) Application for registration of the sectional plan of extension of a section
2) Two copies of the sectional plan of extension of a section
3) The sectional title deed of the extended section
4) Municipality consent – if needed
5) All bonds registered
6) Land surveyor certificate if less than 10% or conveyancer certificate indicating the mortgagees have consented to the extension wherein the extension is more than 10%
7) Transfer duty receipt

Question 54

Prior to the establishment of the Body Corporate, may a developer extent a section. Explain.

Chapter 1 - 71

Answer 54

Yes, it was possible, provided that a certificate was lodged by a conveyancer certifying that:
1) No unit in the scheme had been sold, exchanged or donated; or
2) If a unit was alienated, the developer had disclosed this in writing to the acquirer.

Question 55

Exam Question : A sectional plan of extension of numerous sections belonging to different owners has been approved by the surveyor-general.

May one application be lodged for registration of extension of the units with the reference to each owner or must different application be lodged and each charged a fee? Must all extensions be registered simultaneously.

Chapter 1 - 71

Answer 55

The conveyancer has a choice. In other words one application may be lodged for the registration of the extension of the units setting out all the owners or different application by the different owners of the units may be lodged in one cover. This was a decision at a Registrars Conference (RCR61(a)/2009)

Yes, all the extensions must be registered simultaneously (RCR61(b)/2009)

Question 56

Documents to be lodged for the reserveation of a right of extension for a developer in a sectional scheme

chapter 1 - 75

Answer 56

1) Application by the developer
2) certificate of real right of extension
3) all sectional mortgage bonds
4) Written consent of the bondholders of all the sectional mortgage bonds
5) all the documents prescribed in section 25(2)
6) Conveyercer’s certificate in terms of regulation 29 in terms of which the conveyancer certified tht no unit in the scheme has been alienated; or if an unit was alienated, that the developer had disclosed to the acquirer thereof that the pplication is to be made for the issuing of certificate of real right of extension
7) such other documents as may be prescribed.

Question 57

What documents must be lodged at the deeds office to have a certificate of real right of extension issued in favour of the BC

Chapter 1 - 76

Answer 57

1) Certificate of real right of extension
2) Written consent of all the owners
3) Written consent of all mortgagees
4) Section 25(2) documentation

Question 58

Documents to be lodged in order to exercise a right of extension.

chapter 1 - 79

Answer 58

1) Application for the registration of sectional plan of extension
2) two copies of the sectional plan of extension
3) Certificate of real right of extension
4) local authority approval - if necessary
5) Mortgage bond
6) Consent from mortgagee
7) Certificates of registered sectional title
8) a certificate of real right exclusive use areas

Where the BC brings the application:
1) consent of all owners
2) Written consent of the mortgagees of units in the scheme.

Question 59

Exam Question : Can a right of extension of a sectional title scheme in respect of which certificate of real right has been issued be mortgaged?

chapter 1 - 81

Answer 59

Yes, in terms of section 5(4)(a) of the Sectional Titles Act it may be mortgaged.

Question 60

Exam Question : Can a right of extension of a scheme, reserved in terms of section 25 of the Sectional Titles Act 95 of 1986, be transferred as a whole, a portion or a shre in such right? Motivate your answer.

Chapter 1 - 81

Answer 60

Yes, in terms of section 25(4)(b) of the sectional Titles Act it can be, provided that in the case of a cession affecting only a portion of the land comprising the scheme, such property shall be identified to the satisfaction of the Surveyor-General.

Question 61

Exam Question : What is a right of extension as contemplated in section 25 of the Sectional Titles Act 95 of 1986? Discuss briefly.

Chapter- 1 - 81

Answer 61

A developer may, in his application for the registration of a sectional plan, reserve the right to erect, complete or include from time to time, but within the period stipulated in such condition, for his personal account –

1) A building or buildings

2) A horizontal extension of an existing building

3) A vertical extension of an existing building

on a specified part of the common property with the intention to develop it as a sectional title scheme and to sell its unit, with the right of exclusive use over parts of such common property, if any, to third parties.

Question 62

Exam Question : If a developer holds a real right to extend a scheme, in terms of section 25 of the sectional titles act 95 of 1986, and fails to disclose such right in a deed of alienation, what re the consequence of such failure?

Chapter - 1 - 81

Answer 62

The purchaser is entitled to cancel the agreement or to continue with the agreement in terms of section 25(15) of the sectional titles act 95 of 1986

Question 63

Exam Question : John Smith purchasers unit 11 in the section title scheme Sea View from Maritime Developments (Pty) Ltd. It transpires that sea view is a phase development , and that Unit 11 is in the first phase. The fact that Sea view is a phase development has not been disclosed in the deed of alienation.

1) What are the rights of John Smith?

2) How would you seek to overcome any possible difficulty?

Chapter 1 - 82

Answer 63

1) A deed of alienation in which a real right of extension has not been disclosed shall be voidable at the option of the purchaser. John may decide to declare the deed of alienation void.

2) I would inform john smith of the real right of extension, provide him with the necessary particulars thereof and inform him of his rights as mentioned in 1. If he wishes to proceed with the transaction, I will draw a written notice for him to sign wherein he confirms that he has exercised his option, in terms of section 25(15) and that he has elected not to annul the alienation on the grounds of the defect.

Question 64

Exam Question : Can a right of extension in a sectional title scheme be reserved for an indeterminable period of time? Motivate your answer?

Chapter 1 - 82

Answer 64

No, If you read the relevnt regulation (regulation 14), prescribed form F and Section 25(1) of the sectional Titles Act, it is clear that the legilator intended that the real right of extension must be reserved for a specified period of time.

Question 65

Exam Question : A developer failed to erect further buildings strictly in accordance with the plan to scale which was lodged at the time when the right of extension was reserved in terms of section 25 of the Sectional Titles Act 95 of 1986. Is it the duty of the Registrar of the Deeds to ensure that further buildings are built in strict compliance with the plan to scale? Motivate your answer.

Chapters 1 - 82

Answer 65

No. It is not the Responsibility of the Registrar to determine whether the exercise of the real right of extension in terms of section 25 is in accordance with the plans referred to in section 25(2). It is however the duty of the registrar to determine that the extension is within the physical boundaries of the reserved right.

Question 66

Exam Question : What procedure must be followed where it is ascertained , subsequent to registration of a reservation of extension in terms of section 25 of the Sectional titles Act 95 of 1986 in favour of a developer, that the said right does not disclose a period of time in which the right must be exercised? In your answer you must refer to the difference in procedure, if any, where the body corporate for the scheme is already in existence and where it is not yet in existence.

Chapter 1 - 82

Answer 66

According to Registrar’s Conference Resolution 43 of 2007, a notarial variation agreement can be entered into between the Body Corporate and the developer, with the written consent of all the members of the body corporate as well as the written consent of the mortgagee of each unit in the scheme, failing the agreement of the obtaining of the consents, on order of court must be obtained.

Should the body corporate not be in existence, a second 4(1)(b) application in terms of the Deeds Registries Act may be lodged where a right has been reserved, from time to time, but no specific has been stipulated in the condition.

Question 67

Exam Question : Where a developer has reserved a right of extension in terms of section 25 of the Sectional Titles Act 95 of 1986, but such right of extension has lapsed due to effluxion of time, may such developer, prior to the establishment of the body corporate reserve a further or another right, given the wording of section 25(6A) of the Sectional Titles Act 95 of 1986? If your answer is affirmation, you are required to describe any other procedure that may be required before or simultaneously with the reservation of the further or other right of extension.

Chapter 1 - 82

Answer 67

Although the wording od section 25(6A) is “Where no right of extension was reserved”, Registrar’s Conference Resolution 45 of 2007 makes provision that a real right of extension may be reserved prior to the establishment of the body corporate, provided application by the developer is made in terms of Section 15B(1)(d) of the Sectional Titles Act, read together with section 68(1) of the Deeds Registries Act for the noting of the lapsing of the expired real right of extension.

Question 68

Exam Question : The Jolly Jumper Sectional Title scheme consists of 10 units. All the units have been sold and transferred by the developer. Each has a sectional mortgage bond registered in favour of a bank. There was no real right of extension registered in favour of the developer when the sectional title register was opened in terms of the provision of the sectional titles act 95 of 1986. You are approached by the trustees of the body corporate of the scheme for advice. They wish to extend the scheme by adding more units to enable them to sell the units to generate income as the Body Corporate is finding it difficult to meet its financial commitments. How can this be done and what documents will have to be lodged at the deeds office?

chapters 1 - 83

Answer 68

Section 25(6) of the Sectional Titles Act provides that if no reservation for an extension of the scheme was made by the developer (as in casu), the right to extend the scheme vests in the body corporate.

The right to extend the scheme automatically vests in the Body corporate. However, as soon as the body corporate, wants to deal with this real right, it first has to obtain a certificate of real right of extension issued in its name.

The consent of all members of the body corporate and of every holder of a bond over a unit in the scheme must accompany the certificate of real right of extension.

The body corporate can only exercise, alienate or transfer its real right if extension of the scheme after having obtained 1) the written consent of all its members; as well as 2) the written consent of the mortgagee of each unit in the scheme.

The Body Corporate shall submit a draft sectional plan of extension to the surveyor General for approval, accompanied by a revised schedule specifying the participation quota of each section in the building or buildings depicted on the section plan and the sectional plan of extension.

The Body Corporate may after approval of the sectional plan of extension by the Surveyor General, apply to the registrar for registration of such plan and the inclusion of the additional sections and exclusive use areas (if applicable) in the relevant sectional title registrar.

Documents to be lodged:
(for the obtaining of the title deed for the real right of extension)
1) Draft Certificate of real right of extension
2) The plans referred to in section 25(2)(a) and (b)
3) A schedule indicating the estimated participation quotas of all the sections in the scheme after such sections have been added to the scheme
4) Particulars of any substantial difference between the material to be used in the construction of the buildings and those used in the construction of the existing buildings
5) A certificate by the land surveyor or architect to certify that the plans have been drawn in accordance with the requirements of section 25(2)
6) Written consent of all sectional unit owners and mortgagees of bonds registered over units in the scheme to the issue of the certificate of real right

(For the exercise of the right)
1) Application for the registration of the sectional plan of extension.
2) Two registration copies of the amending sectional plan of extension.
3) Certificate of real right of extension
4) Any mortgage bond registered against the certificate of real right together with the consent of the mortgagee to the registration of the extension of the scheme.
5) Certificates of registered sectional title in respect of each unit and certificate of real right of exclusion use areas.
6) Written consent of all owners and mortgagees of each unit in the scheme to the exercise of the real right.

Question 69

Exam Question : A sectional title register has been opened and a certificate of Real Right of Extension SK123/2017 has been registered.
Your client has transferred/ceded a defined portion of the common property held by the said Certificate of Real Right SK123/20017 to another developer. There is still a portion of the rights held by the Certificate of Real Rights Sk123/2017 and your client has decided to register a mortgage in favour of a bank over the Certificate of Real Rights Sk123/2017. How will you described the property in the mortgage bond to be registered?

Chapters 1 - 83 to 84

Answer 69

The right to erect and complete from time to time within a period of five years with effect as from the date of the registration of the real right of extension for its personal account a further building or buildings on the specified portion of the common property as indicated on the plan referred to in section 25(2)(a) of the Act, filed in this office and to divide such building or buildings into section or sections and common property and to conder the right to exclusive use over a portion of the such common property upon the owner or owners of one or more sections in the scheme known as SANDTON SKYE in respect of the land and the building or buildings situated at Morningside Extension 50 Township, local Authority : City of Johannesburg and shown on Section plan no SS321/2017, with the exclusion of the rights of extension already ceded and held by certificate of real right 123/2017S and subject to such conditions as set out in the aforesaid Certificate of Real Right SK123/2017

Question 70

How is an exclsuive use area created by a body corporate.

Chapter 1 - 90

Answer 70

Same can be created in the rules or by bilateral notarial deed.

Question 71

Exam Question :1.1 Transfer of a unit in a sectional title scheme from the developer to A is registered in 2007. Simultaneously with said transfer an exclusive use area is ceded from the developer to A – forming part of the transaction.

In 2011 transfer of the same unit from A to B is registered. No cession of the exclusive use area is registered, although it formed part of the transaction between A and B. Subsequently various transfers of the unit are registered (i.e, from B to C, From C to D), emanating from the sale of the unit and the exclusive use area.

Presently, yet another transfer of the unit is to be registered. Only now the omission to cede the exclusive use area with each of the previous transfers is discovered. From the Deeds Office records it appears that A is still the registered holder of the exclusive use area. A is no longer the registered owner of any units in the scheme.

How must the said omission be dealt with? Who must now cede the exclusive use area? Motivate your answer.

1.2. Will it make any difference to your answer if A is still the registered owner of the another unit in the sectional title scheme. Motivate your answer.

Chapter 1 - 92

Answer 71

1.1. According to RCR49/2005 as amended by RCR2/2006, section 27(4)(b) and 27(4)(c) provide the procedure to be followed:

If the holder of the real right of exclusive use area is no longer a member of the body corporate, the exclusive use area vests in the body corporate (free from any mortgage bond). Such a holder will cease to be a member of the body corporate when he ceases to be the owner of a unit in the scheme. The body corporate must thereafter apply at the Registrar of Deeds for the issue of a certificate of real right of exclusive use area whereafter the exclusive use area can be ceded to the latest owner of the unit.

It should be noted that the latest owner of the unit has no right of recourse against the body corporate for the cession for the exclusive use area that was omitted to be ceded previously and if an appeal to the moral being of the body corporate fails, a High Court Application can probably be brought to test the constitutionality of the Sectional Title Act.

1.2. Yes, it will make a difference. The holder of the real right is still a member of the body corporate as he is still the owner of a unit in the scheme and therefor the real right still vests in him and not the body corporate. The provisions of section 14 read in conjunction with section 33 of the Deeds Registries Act must be adhered to. Cession of the exclusive use area should there then take place from A to B to C until the last person entitled to the exclusive use area. If a person is unable to procure registration of the cession of exclusive use area, he may apply to court by petition for an order authorising the registration in his name of such property (Exclusive use area)

Question 72

Exam Question : Can a developer grant leases over exclusive use areas.

Chapter 1 - 93

Answer 72

Yes, in terms of section 27(6) of the sectional titles act an exclusive use right is deemed to be a right to immovable property over which a mortgage bond, lease contract or personal servitude may be registered.

Question 73

Exam Question : May an exclusive use area in a sectional title scheme be mortgaged?

Chapter 1 - 95

Answer 73

Yes - Section 27(6)

Question 74

Exam Question : Your client is developing a scheme in terms of the Sectional Titles Act. Your client wants to grant the right of exclusive use of parts of the common property to individual buyers and has asked for advice as to how this can be achieved.

How will you advise your client as to the two different ways in which the right od exclusive use can be created by the developer and briefly discuss the merits of each procedure?

chapter 1 - 95 to 96

Answer 74

The developer can either create exclusive use areas by Section 27(1) of the Sectional Titles Act or Section 10(7) & (8) of the Sectional Titles Scheme Management Act.

First Method : Section 27(1) – The developer imposes a condition, in terms of section 11(2), by which the right to the exclusive use parts of the common property, delineated for this purpose on the sectional plan, are conferred upon owners of sections. A survey is conducted and individual exclusive use areas pegged.

It is the more expensive method of creating an exclusive use right, but is the most secure, as the owner is issued with a title deed to the exclusive use area. It creates a real right which is deemed as a real right to immovable property over which a mortgage bond, lease agreement or personal servitude of usufruct, usus or habitation can be registered.

The developer may create exclusive use areas simultaneously with the opening of the sectional title register and subsequent thereto, but in the latter instance prior to the establishment of the body corporate.

Second method: Section 10(7) & (8) of the STSMA – The developer may make rules which confer rights of exclusive use and enjoyment of parts of the common property upon members of the body corporate. An exclusive use layout plan is prepared, on which must be clearly indicated the locality of the distinctively number exclusive use areas, and the purpose for which such parts may be used. It must include a schedule indicating to which member each such part is allocated.

The owner does not obtain an individual title deed and the right of exclusive use cannot be mortgaged. A leave agreement and personal servitude such as a usufruct, usus or habitation, cannot be registered over it. The owner’s right, however, is reasonably secure.

Question 75

Exam Question : In what circumstances is the developer of a sectional title scheme able to provide for exclusive use areas? Discuss in detail.

Chapter 1 - 96

Answer 75

In terms of Section 27(1)(a) of the Sectional Titles Act, a developer may when making application for the opening of a sectional title register and the registration of a sectional plan impose a condition in terms of section 11(2) in the schedule referred to in section 11(3)(b) whereby the right to exclusive use of such part or parts of the common property delineated for this purpose on the sectional plan is conferred upon the owner of one or more of the sections. This right will be ceded by the sections. This right will be ceded by the developer by way of a unilateral notarial deed in favour of the owners to whom such rights are allocated.

In terms of section 27(1A) in no reservation was made by the developer in terms of section 27(1) and the body corporate has not yet been established the registrar may issue a certificate of real right in respect of a right of exclusive use contemplated in section 12(1)(f) on application by the developer who may thereupon ceded exclusive use areas to the owner/s to whom such right are allocated by the registration of a unilateral notarial deed in their favour.

In terms of section 10(7) & (8) of the STSMA a developer or a body corporate may make rules which confer rights to exclusive use and enjoyment of parts of the common property upon members of the body corporate provided that such rules shall:
1) Include a layout plan to scale on which is clearly indicated:

a. The locality of the distinctively numbered exclusive use and enjoyment parts;
b. The purpose for which such parts may be used;

2) Include a schedule indicating to which member each such part is allocated.

3) Not create rights contemplated in section 27(6)

Question 76

Exam Question : A is the owner of sectional title unit and an exclusive use area for the use of a garden described as G3, in extent 500 square metres. When A became the registered owner of the unit and the exclusive use area, you simultaneously registered a bond in favour of a bank over the unit to secure the loan by A from the bank. The bond should have been registered over the unit and the exclusive use area, but was only registered over the unit.

4.1. How will you rectify this error provide the bank with the security it required initially? (Bear in mind that you will be liable for the wasted cost)

4.2. Provide the complete description of the exclusive use area as it will appear in a mortgage bond to be registered there over, including the reference to the title deed thereof. Supply your own further details.

4.3. How is an exclusive use area transferred to the purchaser thereof.

Chapter 1 - 96 to 97

Answer 76

4.1. Register a collateral bond over the exclusive use area. Alternatively the existing bond may be cancelled and a new bond be registered over the unit and the exclusive use area.
The new bond must clearly state that it is in respect of the same debt previously secured by the existing bond. The wasted costs will then include the registrar’s fee for the cancellation of the existing bond.

4.2. “An exclusive use area described as Garden No G3, measuring 500 (five Hundred) square metres being as such part of the common property, comprising the land and the scheme known as Posh Manor in respect of the land and building or buildings situated at Waterkloof Township, local authority : City of Tshwane Metropolitan Municipality, as shown and more fully described on Sectional Plan SS228/2007
Held by Notarial Deed of Cession SK201/2020S

4.3. By way of a notarial deed of cession.

Question 76

Exam Question : A is the owner of sectional title unit and an exclusive use area for the use of a garden described as G3, in extent 500 square metres. When A became the registered owner of the unit and the exclusive use area, you simultaneously registered a bond in favour of a bank over the unit to secure the loan by A from the bank. The bond should have been registered over the unit and the exclusive use area, but was only registered over the unit.

4.1. How will you rectify this error provide the bank with the security it required initially? (Bear in mind that you will be liable for the wasted cost)

4.2. Provide the complete description of the exclusive use area as it will appear in a mortgage bond to be registered there over, including the reference to the title deed thereof. Supply your own further details.

4.3. How is an exclusive use area transferred to the purchaser thereof.

Chapter 1 - 96 to 97

Answer 76

4.1. Register a collateral bond over the exclusive use area. Alternatively the existing bond may be cancelled and a new bond be registered over the unit and the exclusive use area.
The new bond must clearly state that it is in respect of the same debt previously secured by the existing bond. The wasted costs will then include the registrar’s fee for the cancellation of the existing bond.

4.2. “An exclusive use area described as Garden No G3, measuring 500 (five Hundred) square metres being as such part of the common property, comprising the land and the scheme known as Posh Manor in respect of the land and building or buildings situated at Waterkloof Township, local authority : City of Tshwane Metropolitan Municipality, as shown and more fully described on Sectional Plan SS228/2007
Held by Notarial Deed of Cession SK201/2020S

4.3. By way of a notarial deed of cession.

Question 77

Exam Question : Described briefly how ownership in an exclusive use area in a sectional title scheme is transferred.

Chapter 1 - 97

Answer 77

From the developer by a unilateral notarial deed of cession and from any other seller by a bilateral notarial deed of cession.

Question 78

Exam Question : Your client XY is the developer of a sectional title scheme. The sectional title register has been opened buy no units has been transferred.

XY did not have any exclusive use areas demarcated on the sectional title plan and therefore does not has a certificate of real rights to exclusive use areas in terms of section 27(1) of the Sectional Titles Act, 1986.

XY did, however, in terms of this agreement with buyers of units in the scheme undertake to give exclusive use of certain parking bays and garden areas to such buyers.

XY does not have funds to have the sectional plan amended and the bank which hold the mortgage bond over the scheme is threatening to foreclose if units are not transferred without delay.

XY requires your advice on the following aspects:
1. Is there any manner in which he can create exclusive use areas without having the sectional plan amended thus enabling him to honour his obligations to the buyers; and

2. If your answer to 1 is yes, advise him of the requirements for the creation of such exclusive use areas.

Chapter 1 - 97

Answer 78

1) Yes

2) HE can award exclusive use areas by amending the management or conduct rules of the scheme by inserting the right to exclusive use of certain exclusive use areas to the owner of certain units. As the body corporate has not yet been established he does not even need a unanimous or special resolution, respectively (which will be required if the body corporate is in existence) to amend the rules. The amended rules must, however, first be approved by the chief ombud.

Attached to the rules must be:

a) A layout plan to scale on which is clearly indicated the locality of the distinctively numbered exclusive use and enjoyment of parts, the purpose for which such parts may be used; and

b) A schedule indicate to which member each part is allocated – Section 10(7) & (8) of the STSMA

Question 79

Exam Question : A sectional plan of extension to be registered in terms of section 25 of the Sectional Titles Act 95 of 1986 refers to a servitude of encroachment on neighbouring land. The neighbouring land is subject to a registered mortgage bond. Who must sign the notarial deed required to register a servitude and who must consent thereto. Motivate your answer?

Chapter 1 - 98

Answer 79

The notarial deed of encroachment must be signed by the body corporate and the registered owner of the neighbouring land. If the body corporate is not yet in existence, the developer must sign the notarial deed – (RCR 55 of 2006). The mortgagee of the neighbouring land must consent to such registration.

Question 80

Prepared a cause clause in a deed of transfer wherein the developer has sold his entire interest in terms of Section 34(3) of the Sectional Titles Act.

Chaoter 1 - 102

Answer 80

AND the said appearer declared that his principal, the developer of the scheme known as Toscana No. SS.175/2020 being Robust Properties CC, has in terms of Section 34(3) of the Sectional Titles Act, 95 of 1986, sold the whole of its interest in and to the said scheme, to the undermentioned transferee on the 9th of Jnuary 2022;

Question 81

Documents to be lodged wherein a developer sells his entire right in the scheme in terms of Section 34(3)

chapters 1 - 102

Answer 81

1) Draft deed of transfer - Form H
2) Title Deeds of all units
3) Trasnfer duty receipt of exemption
4) rates clearance certificate
5) Conveyancer’s certificate in terms of section 34(4)(b)
6) Sectional bonds
7) Consent from bond holders.

Question 82

Exam Question : When does a developer of a sectional title development cease to be a member of the body Corporate?

Chapters 1 - 102

Answer 82

When he ceases to hold a share in the common property - (section 34(2)). In other words, when the developer ceases to be an owner of a section in the scheme.

Question 83

Exam Question : Robust Properties CC recently caused a sectional title register to be opened in respect of the a development scheme known as Toscana, situated on Lot 927 Estcourt. The scheme is depicted on Sectional Plan No SS 175/2020 and it consists of 10 units, all being residential flats. The floor rea of each of the ten section is 120 square metres. There are no exclusive use areas.

None of the units has thus far been sold by the close corporate. Several of them are occupied by tenants, as contemplated in section 4 of the Sectional Titles Act. No right to extend has been reserved by the developer. The close corporation has now sold on 9 January 2022, the entire scheme to the trustees of the Angus Temple Family Trust for the sum of R30 000 000.00. The agreement of sale contains provisions acquainting the purchasers fully with the details of the existing leases, the purchasers being quite happy to purchase the scheme subject to these existing leases.

1) Draw the causa and property description as it will appear in the deed of transfer.
2) List the documents that you need to lodge in the deeds office.

Chapter 1 - 102 to 103

Answer 83

Part 1)

The Property description
“All the right, title and interest in the land and building or buildings in the scheme known as Toscana situated at Estcourt Township, City Council of Estcourt, which interest consisting of –
1. Section No 1 in extent 120 (one hundred and twenty) square metres as shown and more fully described on Sectional Plan No. SS175/2020 and undivided share on the common property apportioned in accordance with the participation quota as endorsed on the said sectional plan

Held by virtue of Certificate of Registered Section Title
ST175/2020(1)(UNIT)

2. Section No 2 in extent 120 (one hundred and twenty) square metres as shown and more fully described on Sectional Plan No. SS175/2020 and undivided share on the common property apportioned in accordance with the participation quota as endorsed on the said sectional plan

Held by virtue of Certificate of Registered Section Title
ST175/2020(2)(UNIT)

3. (The property descriptions of section on wards)

The causa clause
AND the said appearer declared that his principal, the developer of the scheme known as Toscana No.SS.175/2020 being Robust Properties CC, has in terms of Section 34(3) of the Sectional Titles Act, 95 of 1986, sold the whole of its interest in and to the said scheme, to the undermentioned transferee on the 9th of January 2022.

Part 2

1) Draft deed of transfer - Form H
2) Title Deeds of all units
3) Transfer duty receipt of exemption
4) Rates clearance certificate
5) Conveyancer’s certificate in terms of section 34(4)(b)
6) Sectional bonds
7) Consent from bond holders.

Question 84

Exam Question : When do rules which have been amended by a body corporate in an exsiting sectional title scheme come into operation?

chapter 1 - 105

Answer 84

The amended rules come into operation on the issuing of a certificate of approval by the Chief Ombud.

Question 85

Exam Question : May manaagement and condurct rules be amended by a body corporate? Disucss briefly?

chapter 1 - 105

Answer 85

Yes, management rules may be amended by an unanimous resolution and conduct rules may be amended by a special resolution of the body corporate.

Question 86

A sectional title register has been opened in respect of a scheme comprising of 15 sections of equal size. The Rules that apply to the scheme are the rules contained in annexures 1 and 2 to the Sectional Title Schemes Management Act.

Discuss how a rule contained in annexure 1 and a rule contained in annexure 2 may be amended. Illustrate your answer with regard to facts set out in the question.

chapter 1 - 105

Answer 86

The rules contained in annexure 1 may only be amended by a unanimous resolution of the body coprorate. In this case, at least 12 of the 15 owners (80% x 15) must be present and all those present, must vaote in favour of the amendment. All the members may in writing accept the amended rule.

The rules contained in annexure 2 may be amended by a special resolution of the members. If proper notice was given, 75% of the members present must vote in favour of the amendment.

In this case, the members in number and the members in value will be the same as the participation quotas are equal.

Question 87

Exam Question : What is the prescribed period within which the first meeting of the body corporate must be convened after the body corporate has come into existence?

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Answer 87

Within 60 days after the body corporate has come into existence.

Question 88

Exam Question : When is a body corproate deemed to be established? And what document is lodged at the deeds office in connection with this?

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Answer 88

With effect from the date on which any person other than the developer becomes an owner of a unit in a scheme, there shall be deemed to be estblished for that scheme a body corporate.

Certificate of Establishment of Body Corporate complied according to form W in triplicate.

Question 89

Exam Question : May an employee of the managing agents be a trustee of a body corproate in a sectional title scheme?

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Answer 89

No - Management rule 6(2) in annexure 1

Question 90

Exam Question : May a company or close corporation be appointed as a trustee of the body corporate?

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Answer 90

No.

Question 91

Exam Question : Must a trustee be an owner in a sectional title scheme?

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Answer 91

No - Rule 6(1) in annexure 1.

Question 92

Exam Question : May the Body Corporate of a sectional title scheme consist of only one owner. Discuss

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Answer 92

Yes. At a Registrars conference it was decided that if all the units in a scheme are trnasferred individually, but in one transfer deed by the developer to one owner, the body corporate will be stablished upon the registration of transfer. In such event the body corprorate will consist of only one owner. However, where the transaction is being registerted in terms of Section 34(3), of the sectional Title Act in terms of which all right, title and interest in the scheme is trnaferred, no body corporate will be established.

Question 93

Exam Question : How many copies of Form W must be ldoged with the Registrar of Deeds for the formation of the Body Corproate, in terms of section 2 of the Sectional Title Schemes managment Act 8 of 2011?

Chapter 1 - 108

Answer 93

Form W must be lodged in triplicate with the first transfer at the deeds registry. After registation, the registrar must -

1) deliver the original certificate to the chief ombud;
2) File one copy on the sectional title file;
3) deliver the remaining copy to the conveyancer.

Question 94

Exam Question : How is a Sectional Bond executed?

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Answer 94

The sectional bond is executed by the mortgagor, or his appoitned agent, on the presence of the conveyancer (both sign)

Question 95

Exam Question : A is the owner of a sectional title unit and an exclusive use area for the use of a garden described as G3, in extent 500 square metres. When A became the registered owner of the unit and exclusive use area, you simultaneously registered a bond in favour of a bank over the unit to secure the loan by A from the bank. The bond should have been registered over the unit and exclusive use area, But was only registered over the unit.

1) How will you rectify this error to provide the bank with the security it required initially? (Bear in mind that you will be liable for the wasted costs.)

2) How is an exclusive use area transferred to the purchaser thereof?

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Answer 95

1. Register a collateral bond over the exclusive use area. Alternatively the existing bond may be cancelled and a new bond registered over the unit and exclusive use area. The new bond must clearly state that it is in respect of the same debt previously secured by the existing bond. The wasted costs will then include the registrar’s fee for the cancelation of the existing bond.
2. By way of notarial deed of cession.

Question 96

Exam Question : Can unsatisfied judgment against a body corporate as defined in the Sectional Titles Act 95 of 1986, be recovered from the owners of the units.

Answer 96

Yes. Section 15(1) of the Sectional Titles Schemes Mangment Act

Question 97

Exam Question : What does the abbreviation “WOP” mean when appearing above a bond endorsement on a title deed?

Chapter 2 - 13

Answer 97

“With other Property” - The property as held by the title in question is mortgaged together with other property under the same bond. The abbreviation comes from the Afrikaans expression “met ander eiendom”. THe Afrikaans is “MAE”.

Question 98

Exam Question : When a transfer which you have lodged in the deeds offices comes up on preparation and there is a note stating that the seller was sequestrated in 1984. How do you deal with this note?

Chapter 2 - 26

Answer 98

I shall certify that the interdict does not apply, as in terms of Section 127A of the insolvent is not rehabilited by the court within a period of 10 years from the date of sequestration of his estate, he shall be deemed to be rehabilited after the expiry of that period, unless the Court, upon application by an interested person after notice to the insolvent, orders otherwise prior to the expiration of the said period of 10 years.

Question 99

Exam Question : A property is registered in the name of A during 1994. A sells the property in 1999 and you attend to the registration of the transfer. The deeds office raises a note requiring you to certify whether an insolvency interdict of 1986 applies to A. You omitted to obtain an affidavit from A regarding his solvency and A is presently overseas and cannot be contacted. What will you do? Motivate briefly

Chapter 2 - 26

Answer 99

An insolvent is automatically rehabilitated after 10 years from the date of the sequestration (section 127A of the Insolvency Act). The insolvency interdict is older than 10 years. The examiner should therefore not have raised the note. I shall certify just below the note that the interdict is not applicable.

Question 100

Exam Question : You receive instructions to the registration of a transfer. You obtain a deeds office computer print-out and note the following entry thereon:
I492/1995 AT
Explain the implication thereof and what you will do to solve your problem.

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Answer 100

I492/1995AT is an attachment interdict that has been noted against the property. No transfer can be registered unless the attachment has been uplifted )other than a transfer by the sheriff who attached the property).
I shall obtain the following information from the attachment notice filed:
1) Which sheriff effected the attachment.
2) What the case number is
3) What the parties names are
4) Who the attorneys that did the attachment were.
If the attorney’s details are not available, I will contact the sheriff and get the necessary details.
I shall then establish what amount must be paid to the plaintiff in order to uplift the attachment. If the proceeds of the sale are sufficient, I shall provide the plaintiff with an acceptable guarantee or undertaking to enable the plaintiff to have the attachment uplifted.
Once the attachment has been uplifted, the transfer can be registered.

Question 101

Exam Question : You obtain a computer printout from the deeds office. Assume that any one of the following references appear on the printout. Explain briefly the implications of each one.
1. EX421/2001
2. VA T489/2004
3. I782/2006AT
4. K123/2007S
5. BN891/2003
6. B246/2006AL

Chapter 2 - 35

Answer 101

1. A property, or a portion thereof, has been expropriated
2. A certified copy of T489/1996 has issued in terms of regulation 68(1).
3. A sheriff has attached the property under a writ issued by a court.
4. A notarial deed of servitude has been registered against the property.
5. A notarial bond has been registered by the person in respect of whom the printout was obtained.
6. A contract as defined in the Alienation of Land Act 68 of 1981

Question 102

Exam Question : What is meant by the following abbreviations seen on a deed office computer printout or deed:
Describe a situation where one would encounter:
1. MAE/WOP
2. I200/96AT
3. I100/89LG
4. I100/89CY
5. EX/ONT

Chapter 2 - 53

Answer 102

1. This abbreviation stands for “with other property”. When a bond endorsement on a title deed bears this abbreviation on top of the endorsement, it means that it is not the only property mortgaged under that bond. There are other properties also mortgaged under the same mortgage bond.
2. This is an attachment interdict. Where for example a person has fallen into arrears with his bond payments and the mortgagee has taken judgment against him, the property will be attached by the sheriff and cannot be disposed of until the attachment has been uplifted.
3. This is a Surveyor General interdict. It is often seen where a property has been subdivided into 2 portions, leaving no remainder. Also with excisions in Gauteng.
4. This is an interdict applicable to a company, for example where a company as opposed to a natural person has an interdict noted against it, such as a liquidation.
5. This is an expropriation interdict indicating that there was an expropriation. It is imperative when drawing the deed in these circumstances to check whether or not the expropriation applies to the property you are transferring. If it does, your new deed must be made subject thereto.

Question 103

Exam Question : The following sample notes which may be raised against deeds lodged in the deeds registry. In each case indicate firstly whether the note in question will result in rejection of the deed and indicate secondly how you would over come the note.

1) Does S2393/2001 apply?
2) Identity number of the transferor is not the same as the number in computer printout (Last two digits differ).
3) Identity number of the Mortgagor is not the same as the number in the computer printout (first two digits differ).
4) I113/2004AT applies.
5) In respect of the above mentioned notes, would It have been possible to anticipate the notes(thereby enabling you to take the action mentioned in your answer and so avoid prior to lodgement, and so avoid possible rejection.

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Answer 103

1) S2393/2001 will not result in a rejection. This sequestration note can be found against a person’s name who has been sequestrated or against a person with the same or similar name who is not sequestrated. You have to ascertain whether your client is sequestrated through diligent enquiries and if not, the conveyancer can certify that the note is not applicable.
2) No rejection will result if the difference is attributable to only the change in the last three digits. I might be that the transferor has been issued with a new identity document. The conveyancer must make due enquiries and certify that the transferor has been issued with a new identity document with the new number.
3) The mortgage bond will be rejected. If the computer printout and records of the deeds office are incorrect, you will have to do an application in terms of section 4(1)(b) of the Deeds Registries act to rectify its records. If your mortgage bond is incorrect, you will have to redraft the relevant pages with the correct number and also amend the power of attorney with initialling by the mortgagor and the two witnesses.
4) This is an attachment interdict. If it is not a transfer in pursuance of a sale in execution, the deed would have been rejected. You have to do a thorough searches before lodgement to over this oversight.
5) Yes, it would have been possible to anticipate these notes by doing thorough deed searches on each transaction on receipt of the instructions.